Thorpe Regulatory News (TFW)

F W Thorpe Plc

INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2017

F W Thorpe Plc - a group of companies that design, manufacture and supply professional lighting systems - is pleased to announce its interim results for the six months ended 31 December 2017.

Key points:

· Performance of most Group companies was similar to the record figures of 2017

· Famostar acquisition completed in December for initial consideration of €7.6m

· Interim dividend increased to 1.40p (Interim 2017: 1.35p)

For further information, please contact:

CHAIRMAN'S INTERIM STATEMENT

The Group started this financial year reasonably well, and at the halfway point had increased revenues by 3.8% and operating profit by 0.7%. Order income did not reach the record highs of 2016/17, making a further record-breaking full year result a challenge, as indicated in my update at the time of our AGM in November 2017.

Following the rebranding of Compact Lighting as Thorlux, Thorlux now has the benefit of additional retail revenue, which is now making a small contribution. Elsewhere, the majority of Group businesses performed in line with or ahead of last year, with the exception of TRT, where orders increased but margins reduced due to market pressure on selling prices. Improvements at TRT are underway for the second half of this financial year.

Certain overseas operations performed well, with a particularly positive contribution from those in the UAE and Australia. Lightronics delivered a large-scale project in Rotterdam and its performance is in line with that of last year.

Famostar, an emergency lighting specialist in the Netherlands, was welcomed to the Group. Within the Group, we see this as a complementary addition to the Lightronics operation, improving Lightronics' product offering and giving the opportunity to share Group technology in the future.

Having completed the new TRT factory and surface mount technology (SMT) electronics assembly line, the Group is now turning its attention to other areas. In January, the Group acquired the Lightronics factory and neighbouring property for €3.4m, providing a stable footing for expansion. On this site, the Group plans to build its European Application Centre, similar to the very successful Thorlux centre in the UK. It will showcase Lightronics, Thorlux and other Group products and systems.

Product development is a foundation of all Group businesses and continues apace. At Thorlux, additional SmartScan wireless lighting system features were launched, as planned. In addition, a raft of new and improved luminaires will appear on individual business websites before the end of the current financial year.

The results for the six months to 31 December 2017 allow for an increased dividend of 1.40p (Interim 2017: 1.35p), representing a 3.7% increase.

It remains a challenge to maintain last year's result, in spite of the interim performance. Revenue and profits should be bolstered by the addition of Famostar in the second half of the year; however, whilst the Group will endeavour to reach record levels, it seems unlikely.

Within the Group we will, of course, continue to work on and invest in projects that support our vision of stable long-term growth into the future.

Mike Allcock

Chairman

15 March 2018

F W Thorpe Plc

CONSOLIDATED INCOME STATEMENT

for the six months to 31 December 2017

GROUP STATEMENT OF COMPREHENSIVE INCOME

for the six months to 31 December 2017

All comprehensive income is attributable to the owners of the company.

* The profit on items that may be reclassified to profit or loss of £263,000 is due to the increase in market value of available for sale financial assets.

CONSOLIDATED BALANCE SHEET

as at 31 December 2017

GROUP STATEMENT OF CHANGES IN EQUITY

for the six months to 31 December 2017

GROUP STATEMENT OF CASH FLOWS

for the six months to 31 December 2017

Notes to the Interim Financial Statements

1. Basis of Preparation

The consolidated interim financial statements for the six months to 31 December 2017 have been prepared in accordance with the recognition and measurement principles of applicable International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU), IFRIC interpretations and the AIM Rules for Companies.

The figures for the period to 31 December 2017 and the comparative period to 31 December 2016 have not been audited or reviewed and are therefore disclosed as unaudited. The figures for 30 June 2017 have been extracted from the financial statements for the year to 30 June 2017, which have been delivered to the Registrar of Companies. The interim financial statements do not constitute statutory accounts within the meaning of the Companies Act 2006.

The financial statements are presented in Pounds Sterling, rounded to the nearest thousand.

The interim financial statements are prepared under the historical cost convention, modified by the revaluation of certain current and non-current investments at fair value through profit or loss.

The accounting policies set out in the financial statements for the year ended 30 June 2017 have been applied consistently throughout the Group during the period.

2. Segmental analysis

The segmental analysis is presented on the same basis as that used for internal reporting purposes. For internal reporting F W Thorpe is organised into nine operating segments, based on the products and customer base in the lighting market - the largest business is Thorlux, which manufactures professional lighting systems for the industrial, commercial and controls markets. During the period, Compact Lighting Limited has been incorporated into the Thorlux segment further to previous announcements. The Lightronics business is a material subsidiary and therefore disclosed separately.

The seven remaining continuing operating segments have been aggregated into the 'other companies' segment based on their size, comprising the entities Philip Payne Limited, Solite Europe Limited, Portland Lighting Limited, TRT Lighting Limited, Thorlux LLC, Thorlux Australasia PTY Limited and Famostar B.V.

F W Thorpe's chief operating decision-maker (CODM) is the Group board. The Group board reviews the Group's internal reporting in order to monitor and assess the performance of the operating segments for the purpose of making decisions about resources to be allocated. Performance is evaluated based on a combination of revenue and operating profit. Assets and liabilities have not been segmented which is consistent with the Group's internal reporting.

Inter-segment adjustments to operating profit consist of property rentals on premises owned by FW Thorpe Plc, adjustments to profit related to stocks held within the Group that were supplied by another segment.

2. Segmental analysis (continued)

Comparative periods for the Other Companies segment include Compact Lighting Limited. For the current period Compact Lighting Limited is incorporated in the Thorlux segment following the reorganisation of this business in July 2017.

3. Investment in Subsidiary

In December 2017, the Group acquired 100% of the share capital of Famostar B.V., an emergency lighting specialist in the Netherlands. The company was acquired by Lightronics Participaties B.V. for an initial consideration of €7.6m (circa £6.8m) with an estimated additional €0.5m (£0.4m) payable subject to performance conditions relating to EBITDA in 2017 and 2018. Based on current best estimates, a further €2.7m (£2.4m) could be payable to the holders of share appreciation rights in Lightronics Participaties B.V. which is subject to future performance conditions linked to a significant increase in EBITDA over the next three years.

Amounts recognised in respect of this acquisition are:

A fair value exercise has not yet been performed on the acquired assets and liabilities; this will be undertaken for the current financial year-end. The outcome of this exercise may result in changes to the fair value of the acquired assets and liabilities, as well as associated goodwill.

Unaudited results for the year ended 31st December 2017 showed revenues of €7.7m, and profit before tax of €1.3m. This acquisition is expected to make a minor contribution to Group profits for the current financial year.

4. Earnings per share

The basic earnings per share is calculated on profit after taxation and the weighted average number of ordinary shares in issue of 115,750,590 (Interim 2017: 115,675,590) during the period. The diluted earnings per share is calculated on profit after taxation and the weighted average number of potentially dilutive ordinary shares in issue of 116,502,118 (Interim 2017: 116,347,665) during the period.

5. Dividend

The interim dividend is at the rate of 1.40p per share (Interim 2017: 1.35p), and based on 115,875,590 shares in issue at the announcement date the dividend will amount to £1,622,000 (Interim 2017: £1,562,000). The interim dividend will be paid on 12 April 2018 to shareholders on the register at the close of business on 23 March 2018, and the shares become ex-dividend on 22 March 2018.

A final dividend for the year ended 30 June 2017 of 3.55p (2016: final of 2.85p) per share, amounting to £4,114,000 (2016: £3,297,000) was paid on 30 November 2017.

6. Events after the Balance Sheet Date

In January 2018, the Group acquired the property in the Netherlands occupied by its subsidiary, Lightronics Participaties B.V. for €3,400,000.

7. Availability of interim statement

Copies of the interim report are being sent to shareholders and will also be available from the company's registered office or on the company's website (www.fwthorpe.co.uk) from 29 March 2018.